South Florida Homebuyers Bear Burden of Keeping Prices Within Reach
South Florida homes remain significantly overpriced but not as much as they were during the summer, according to a from researchers at Florida Atlantic and Florida International universities.聽
Miami-Dade County is 18.51 percent above its long-term pricing trend, compared to 19.20 percent in July, while Palm Beach County is overpriced by 18.32 percent, down from 18.70 percent. Broward鈥檚 degree of overpricing fell to 16.41 percent from 17.40 percent. The analysis is based on more than 40 years of housing data from the (FHFA).
While the run-up in prices may feel 鈥渦nnervingly reminiscent鈥 of the historic housing collapse of 2006-2011, the level of overpricing and the economic climate are vastly different today, say economist , Ph.D., and , D.B.A., both of 抖M女仆鈥檚 , and , Ph.D., of . What鈥檚 more, the average home across all three counties in 2008 was roughly 65 percent above its long-term pricing trend.
鈥淲e鈥檙e nowhere near the level of overpricing that occurred more than a decade ago so another crash is pretty unlikely,鈥 Johnson said. 鈥淩emember, the economy back then was in much worse shape, with higher mortgage rates, softer underwriting standards and a glut of homes for sale.鈥
The current environment features mortgage rates near record lows and a severe shortage of homes on the market, both of which help to keep prices elevated. Prospective buyers need to counteract those two forces and bargain aggressively to avoid greater degrees of overpricing, which could threaten the stability of local housing markets, according to Johnson.
鈥淲hile home prices continue to rise, they are doing so at a slower rate of appreciation, which is easing the degree of overpricing,鈥 he said. 鈥淚t鈥檚 really the current crop of buyers who bear the responsibility of keeping a lid on home prices.鈥
In a frothy market, buyers are tempted to get into bidding wars, for fear that they will be left out, but this is the time to be the most discriminating, Beracha explained.
鈥淔alling in love with one house is the surest way to overpay,鈥 he said. 鈥淒on鈥檛 get caught up in the emotion of the moment. Walk away if the asking price gets too high or the contract terms seem too one-sided for the seller. There will always be another property.鈥-抖M女仆-
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